Court Dismisses NIMBY Lawsuit Against Echo Park Project in Win for Affordable Housing

In a major win for affordable housing in Los Angeles, on February 5, 2026, a federal court threw out a challenge aimed at stopping a 100% affordable housing project in Echo Park. In the decisive ruling, Judge Percy Anderson of the U.S. District Court for the Central District of California rejected an attempt by neighboring property owners to derail the project through an unusual set of federal claims.

The City of Los Angeles had approved the project through the streamlined process for affordable housing made available by the Mayor’s Executive Directive 1 and California’s Density Bonus Law, Gov’t Code § 65915. The owners of an adjoining property sued the City and the developers under 42 U.S.C. § 1983 (“Section 1983”), alleging that the ministerial project approval violated their due process rights and constituted a governmental taking of property without just compensation.

The Court rejected the neighbors’ arguments and ruled that the neighbors had not alleged any deprivation of a constitutionally protected property interest in support of their claims. The Court held that alleged diminution in property value was insufficient to allege a takings claim and that “the important public good of providing additional affordable housing within transportation corridors” weighed in favor of dismissing the takings claims. The Court further reasoned that, under California law, a property owner has no right to an unobstructed view and there was no authority entitling the neighbors to compensation merely because the City had approved the construction of a lawful structure on a neighboring property. 

The Court also denied the neighbors’ procedural due process claim, holding that the City’s approval of a project on a neighboring parcel did not trigger due process protections under the U.S. Constitution. 

As to the developers, the Court held that the neighbors’ Section 1983 claim was improper because the developers were not state actors and obtaining the City’s approval to build affordable housing did not transform them into an arm of the state. 

With the case dismissed, the developer is moving forward with construction of the project.

The case is Maria De La Cruz, et al. v. City of Los Angeles, et al., No. CV 25-7024-PA (C.D. Cal.).

Allen Matkins litigators Rick Friess, Catriona Lavery, and Lucas Urgoiti represented the developers, Building Bloch Capital, LLC and BBC Scott, LLC.

Allen Matkins has a dedicated team following changes affecting housing development in the City of Los Angeles and California’s Density Bonus Law.